On the CJEU’s case-law concerning the “social tourism” that preceded the Brexit referendum – between forces of cohesion and fragmentation

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One week prior to the scheduled date of the referendum about the UK leaving the EU a ruling of the Court of Justice of the European Union was published. The decision was to dismiss an action for failure to fulfil an obligation (article 258, TFEU) which had been filed by the European Commission against the UK seeking the conviction of such Member State for violating the prohibition of non-discrimination on ground of nationality[i]. Throughout the year of 2008, the European Commission received several complaints by citizens from other Member States living in the UK with objections about the refusal of British authorities to provide them social benefits due to the absence of proof of the right to reside. Following that, the EC accused the UK of not fulfilling the Regulation 883/2004 (on the coordination of social security systems) because it subjected the applicants of certain social benefits – namely the dependent child allowance or the child tax credit – to the so-called test of right to reside. The Commission considered that requirement incompatible with the meaning of the mentioned Regulation – once it makes reference to a habitual residence and not a legal residence – and, simultaneously, discriminatory towards the nationals from other Member States as such requirement is automatically fulfilled by the British nationals living in the UK.

The core of the case was to evaluate if a Member State’s permission to attribute certain social benefits only to the people who legally reside in its territory is in itself discriminatory under the terms of article 4 of the Regulation 883/2004. Under the title “equality of treatment”, the article states that, unless otherwise provided for by the own Regulation, persons to whom it applies shall enjoy the same benefits and be subject to the same obligations under the legislation of any Member State as the nationals thereof. All in all, in every situation comprised by the ratione materiae domain of application of the EU Law, any European citizen may invoke the prohibition of discrimination on ground of nationality which shows in article 18, TFEU and it is materialised in article 4 of the Regulation 883/2004. Those situations include the ones deriving from the exercise of the freedom to move and to reside in the territory of the Member States, which are laid in articles 20 (2), 1º§, a) and 21, TFEU.

On the presumption of legal equality amongst the European citizens, the CJEU has been confronted with the issue of determining whether a Member State is obliged to attribute social benefits – that are attributed to its own citizens and to the Union’s citizens who legally reside in it – to a Union’s citizen whose residence in the respect territory “is not legal”, that is, it does not fulfil the requirements fixed in article 7 of the Directive 2004/38 (on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States). Such requirements correspond to the demand of sufficient resources and a health insurance – what excludes mostly the economically inactive citizens who move across the EU in search of better life conditions. The objective of this demand would be to prevent that the inactive citizen becomes a “unreasonable burden” to the social security regime of the host Member State as well as to hinder that he/she uses the system of social protection of a Member State to finance his/her subsistence. Anyhow, before the targeted case-law, a Member State would have difficulties to demonstrate that the lack of resources in a specific individual situation was capable of turning into an “unreasonable” financial burden.[ii]

To the supporters of the risk of “social tourism” the difference of treatment towards the economically inactive Union’s citizens has, above all, a pragmatic basis. In this regard, as long as the social security regimes and the amount of the benefits are not harmonised in the EU, there’s the possibility of “social tourism” directed to a Member State with a more favourable social security atmosphere. Hence, the narrative of “social tourism” advocates that, as the Treaties to a great extent leave to Member States the attributions in the social policy area, an economic migrant will not claim any subsistence allowance in the host Member State.[iii] For it, in the recent case-law of the CJEU on “social tourism” (rulings Brey[iv], Dano[v], Alimanovic[vi] and finally EC v. UK) the point to be determined was whether it is legitimate that a Member State takes into account the “legality of the residence” (that means the existence of sufficient resources and a health insurance) in the context of the attribution of social benefits to Union’s citizens who reside in its territory. Or more concretely, in EC v. UK the CJEU had to decide if the applicability of the Regulation 883/2004 (according to which the habitual residence would be enough to the concession of social benefits) should or should not overpower the dispositions of the Directive 2004/38 (according to which the legal residence of a EU citizen in a host Member State depends on sufficient resources and a health insurance).

The CJEU tuned in the frequency by which the Union’s legal order may not be composed by a plurality of stalled pieces. So, if the EU law submits the exercise of free movement and residence to certain limits and conditions – expressed in the Directive 2004/38 – the dispositions of the Regulation 883/2004 cannot be interpreted in a way to neutralise the conditions and limits that accompany the recognition and the enshrinement of that freedom.In this (allegedly) systemic perspective, a Member State would only be forced by Regulation 883/2004 to concede social benefits to a Union’s citizen who is “legally” exercising his/her right of free movement and residence – that is only to those who attend the criteria established in the Directive 2004/38. According to this interpretation, the difference between British citizens and other Member States’ citizens would be placed in a state previous to the applicability of article 4 of Regulation 883/2004 – reason why it would not be deviated[vii].

This is probably the most criticised CJEU’s case-law lately[viii]. Not only because the risk of “social tourism” has been discredited a long time ago by the statistics announced by the European Commission[ix] – which shows that the financial impact of the economically inactive citizens is minor – but mostly because it represents a jurisprudential retreat resulting from the pressure made by Member States over the EU institutions in face of the populist and xenophobic threats that growingly poison the national public opinions and are reflected in electoral results. The same pressure that guided the decision concerning a new framing for the permanence of the UK in the EU – decision adopted by the European Council of 18th/19th Feb. 2016 and that it would have been effective if the United Kingdom had decided to remain[x]. In the attempt of convincing the British to vote for the permanence in the EU, the European Council admitted clear step backs in the EU citizenship acquis – regarding economically active citizens who exercise their freedoms of movement! – whose consequences in the free movement policy it is not possible to measure, even if the UK leaves the EU and the decision does not entry into force. In the light of the results of the Brexit referendum, will the European institutions have learnt the lesson?

[iii] See Opinion Trojani, of 19th de Feb. 2004, C-456/02, recital 18 (Advocate General L. A. Geelhoed, whose opinion the CJEU did not follow); Damian Chalmers/Christos Hadjiemmanuil/Giorgio Monti/Adam Tomkins, European Union Law. Text and materials, Cambridge University Press, Cambridge, 2006, p. 599; Agustín José Menéndez, European citizenship after Martínez Sala and Baumbast: has European Law become more human but less social?, in The past and future of EU Law, cit., p.392.

[viii] On the issue, see Sandra Mantu/Paul Minderhoud, Exploring the limits of social solidarity: welfare tourism and EU citizenship, in UNIO-EU Law Journal, vol. 2, June/2016; Daniela Guimarães, The right of free movement and the access to social protection in the EU: the economical dimension. Notes on the case Elisabeta Dano v Jobcenter Leipzig, C-333/13, in UNIO-EU Law Journal, vol. 1, July/2015 (http://www.unio.cedu.direito.uminho.pt).

[ix] See the report of 14th Oct. 2013 (DG Employment, Social Affairs and Inclusion, DG Justice Framework Contract) “A fact finding analysis on the impact on the Member States’ social security systems of the entitlements of non-active intra-EU migrants to special non-contributory cash benefits and healthcare granted on the basis of residence” and in whose summary it reads: “it can be concluded that the share of non-active intra-EU migrants is very small, they account for a similarly limited share of SNCB recipients and the budgetary impact of such claims on national welfare budgets is very low. The same is true for costs associated with the take-up of healthcare by this group. Employment remains the key driver for intra-EU migration and activity rates among such migrants have indeed increased over the last 7 years”.

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